A subplot worth following Mergers and acquisitions accelerate this year: brand advertising – or, more precisely, its metamorphosis into a marketing-entertainment mashup.
The days when this was just a theory are over. WPP teaming up with Universal Music Group for ad-fueled entertainment, talent agencies jumping into the ad industry, and the rise of new players like Common Interest make one thing clear: brand dollars are waiting no more – they are already here and moving quickly.
“For a long time we have been witnessing the death of the countryside and the birth of the cultural moment. Traditional advertising is the understudy of entertainment, while brands simply learn to be the protagonists of cultural stories,” explained James Kirkham, co-founder of brand consultancy Iconic.
Nowhere is this intersection more stark than in the creator economy, where marketing and entertainment collide. Creators and influencers, once fringe, now play a central role in investment strategies, determining how brands pursue cultural relevance.
Naturally, negotiators are eager to profit. Publicis Groupe’s acquisition of Influential, Stagwell’s purchase of Leaders and Trouble Maker’s purchase of branded entertainment production studio The Outfit are just some of the initiatives over the past year that have been riding high. this wave. And if initial momentum is anything to go by, 2025 should bring a lot more.
Case in point: Later, a social media and influencer marketing company purchased the social commerce app Mavely for $250 million. For what? Capitalize on marketers’ growing obsession with influencer marketing as a performance game. Mavely’s model, which pays creators commissions for the sales they generate, appeals to these senses by offering them a return on investment with a side of cultural relevance.
“When we run campaigns for our clients, we leverage the data we have accumulated from over 350 million posts across our social platforms as well as 3 million influencer activations,” explained Scott Sutton, CEO from Later. “On Mavely, we will now see millions of transaction details from their 120,000 creators and over $1 billion in gross merchandising volume (GMV). So when we work with a brand, we can now predict performance with high accuracy and generate provable ROI for them.
The fact that Sutton is already considering other deals beyond Mavely speaks volumes. For brands, creators are not the end game, they are the means to an end. And that goal is clear: provable performance wrapped in cultural relevance.
“As technology has become more and more important for everyone for efficiency purposes, we have found that brands really want to understand what is culturally relevant to be authentic,” said Matthew Lacey, partner at the firm mergers and acquisitions advisory firm Waypoint Partners. “We have long anticipated the collision of these worlds, and it is finally starting to happen.”
In many ways, this is already the case. The flood of creative-focused deals is showing signs of becoming a real flood.
Among those to watch is Common Interest, the marketing holding group which positions itself at the heart of this marketing-entertainment cross-over. Its founders are embarking on a mergers and acquisitions spree, building a network of companies designed to equip CMOs with the tools they need to develop, support and measure strategies rooted in cultural relevance.
“In 2023, many brands have asked themselves and their partners, ‘how can I beat this brief?’” said founder Anthony Freedman, former regional president of Havas. “At the same time, there has been a resurgence of interest in the brand more generally, no doubt in part due to ongoing economic pressure where cost increases had to be passed on to consumers, and a recognition that strong brands are better positioned to do this without widespread customer churn. »
This reality played out repeatedly in the post-pandemic landscape, where companies with the strongest brands demonstrated greater price elasticity – read: they could raise prices without losing customers. The industry, although slow to act, is starting to take over.
For example, WPP’s acquisition of New Commercial Arts, Disney’s $1.5 billion investment in Epic Games, and the launch of LVMH’s entertainment division all highlight a growing recognition of the need to align marketing , entertainment and cultural relevance. Each agreement, in its own way, reflects this refocusing – not in urgency but with deliberate intention.
“When WPP acquires creative powers and Disney invests billions in gaming, they recognize that cultural currency is the only currency that really matters,” Kirkham said. “Both Epic Games and Disney are the true architects of tomorrow’s brand experiences. The lines between marketing, entertainment and culture are becoming beautifully blurred. »
As merger and acquisition activity increases, the question is not whether this trend will continue, but rather how far it will go.